A supplier of signs and related services to a number of major companies has claimed in the High Court that a former director and shareholder has set up a rival business in breach of a non-compete clause on his departure.
Gary Upton was until November 2023 a shareholder and director of Seretay Ltd, the holding company for a number of firms in the Image Quest group, trading as IQ Branding Solutions, which specialises in signage, print, and display solutions. Its customers include IKEA, Woodies, FBD Hotel Group and Sherry FitzGerald as well as multiple shopping centres.
Mr Upton managed key accounts, handled new business and was regarded as “a very effective operator” for the company. He had joined in 2011 as a director along with Jannetje Van Leeuwen and her partner Paul O’Mahony.
Last year, discussions took place with a third party to purchase all of Mr Upton’s shares along with enough of Ms Van Leeuwen’s and Mr O’Mahony’s shares to give them majority control.
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“That deal fell through at the very end for reasons we are still not clear on”, Ms Van Leeuwen said in an affidavit seeking the injunction.
The action is being brought by Zeahix Ltd, of which Ms Van Leeuwen is a director, and by Buildixe, of which she is secretary. The case is against Mr Upton and two companies, Marketior Ltd and Monster Branding Ltd.
On Thursday, Mr Justice Brian Cregan granted an interim ex parte injunction to Anthony Thuillier BL, for Zeahix and Buildixe and said the case could come back next week. The injunction prevents the defendants from competing and from soliciting customers and employees.
In her affidavit, Ms Van Leeuwen said after the deal to sell shares to a third party fell through, Mr Upton offered his shares for sale to his co-directors.
A deal was agreed whereby Mr Upton and his company Marektior were paid €500,000, inclusive of a €114,000 uplift to their market value as a way of balancing a two-year non-compete clause in the deal.
Ms Van Leuwen said Mr Upton told staff and customers that he was departing to “explore new opportunities in the health fitness sector”. He had said he wanted to open a gym, she said.
However, she said that after noticing a drop-off in business in the past number of months, the firm learned Mr Upton had begun to compete not long after leaving, including luring away employees and, most damagingly of all, poaching clients.
In one instance earlier this month, she said one employee of IQ noticed a car of a former IQ employee parked outside the premises of Monster Branding, a company which Mr Upton set up last March.
This led to WhatsApp communication between the two with the former employee “imploring” the current employee not to divulge that Monster Branding was in existence and in competition. “But remember about this, it’s a big, big secret I think”, he said.
Subsequently, Mr Upton sent a message to the same current employee of IQ saying he was “back in action” and asking him to “keep this to yourself please”.
“We were shocked to discover this betrayal by Gary”, Ms Van Leeuwen said.
She said on his departure Mr Upton retained a company laptop and phone and it was obvious to her he was using information on these devices in furtherance of his Monster Brand business.
She also learned he had tried to solicit business from clients like IKEA and JC Decaux.
An analysis of the damage as a result of all this has identified several clients whose business has either declined significantly or stopped altogether in recent months.
Among them are Woodies with a suspected loss of some €80,000, Diamond Furniture some €68,000 and Verve, The Live Agency, some €58,000, she said.
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